BUSINESS, ENTERPRISE AND REGULATORY REFORM

Manufacturing: New challenges, New Opportunities

Malcolm Wicks: My noble Friend the Parliamentary Under-Secretary of State for Business and Competitiveness has made the following statement:
	"On 8 September the Government unveiled a new strategy for the UK's manufacturing sector—"New Challenges, New Opportunities"—to help UK firms take advantage of changing global trends in manufacturing. A summary document is also available.
	In bringing forward its refreshed manufacturing strategy, developed by the Department for Business and the Department for Innovation, Universities and Skills, in partnership with industry, the Government are reaffirming its commitment to the sector as a key part of a mixed and balanced UK economy in the future.
	The refreshed strategy is intended to set out a dynamic framework which will shape further new policies and programmes in the future. It builds on the Government's manufacturing strategy of 2002, which was the first strategy for the sector for more than 30 years.
	The environment facing manufacturers has undergone and continues to face significant change. To understand what is powering these shifts we have conducted consultations with the Ministerial Advisory Group on Manufacturing and other stakeholders, and drawn upon academic and survey evidence. This has revealed the importance of five inter-related dynamics that have been and continue to be instrumental in reshaping global manufacturing.
	The increasing prevalence and complexity of global value chains, underpinned by developments in information and communication technology, and consequent fragmentation of processes, encouraging specialisation.
	The accelerated pace of technology exploitation as the pace and demand for change implementation has increased.
	The growing importance of investment in intangibles such as design, branding and R&D.
	The increased recognition that investment in People and Skills is among the most important for companies to make.
	The move to a low carbon economy as the response to climate change creates both new challenges and opportunities for manufacturing firms.
	These dynamics are described in detail in the Economics paper: "Five Dynamics of Change in Global Manufacturing", which accompanies the strategy. The strategy itself sets out Government's view of what the sector needs for success in the long-term. It includes:
	Global Value Chains: International fragmentation of production—Manufacturing attracts more FDI to the UK than any other country in Europe and globally the UK is second only to the US. Manufacturing growth in other countries means opportunities for the UK. UK Trade & Investment (UKTI) will allocate additional resources to target a package of new support for 600 UK companies of all sizes to identify manufacturing value chain opportunities in India and China. And the UK Intellectual Property Office (UK-IPO) will advise on using and protecting IP in these markets.
	Technology exploitation: Accelerating the spread of new technologies—In addition to the existing centre in Yorkshire and the centre currently being built in Glasgow, there will be a new Manufacturing Technology Centre in Coventry. It will have industrial scale pre-production and demonstration facilities, which could lead to £130 million of investment in business-led applied research and its exploitation over the next 10 years. And the Technology Strategy Board will invest £24 million into research central to high value-added manufacturing.
	Intangibles: Competitive advantage from non-traditional elements of manufacturing—Firms in the UK are using other areas of leading British skills and industry to make them more globally competitive. UK and global businesses are growing their investment in intangible or knowledge assets, such as software, design, brand building in order to improve their global competitiveness and to meet the changing needs of customers. The Design Council and Regional Development Agencies will implement the findings of the current review of the Designing Demand programme to increase penetration of the programme across the regions. We have supported the creation of the UK Design Skills Alliance and will work with the alliance to help ensure the world-leading UK design sector has the skills required by manufacturers to compete in global markets.
	People: Improving the skills base and attracting talent into manufacturing—The strategy sets out a renewed focus on apprenticeships, including the extension and expansion of high quality apprenticeships by approximately 1,500 new places, in addition to the 9,000 places announced earlier this year. We will expand apprenticeships by inviting bids from larger manufacturers to train additional apprentices, including for their supply chains. And for manufacturers, there will be a clear focus on simplifying their experience of the skills system so they can quickly and easily access the skills and training support they need. The "Memorandum of Understanding" published alongside the strategy sets out how delivery partners will work together to simplify the offer to employers.
	A new body, "Manufacturing Insight" will be tasked with making the public perception of manufacturing reflect the reality of a successful, modern and broad sector and ensuring young people are aware of the exciting career opportunities available. There will also be a "Manufacturing the Future" schools campaign to promote manufacturing career prospects to young people.
	Low Carbon Economy: Opportunities for manufacturing—Next year, a low carbon industrial strategy will address the challenges facing manufacturers as they try to reduce their carbon footprint and the huge opportunities from investment in energy and a shift to a low carbon economy. The Office of Nuclear Development will work with industry partners to develop the nuclear supply chain and maximise high value-added work captured by UK manufacturers from an estimated £20 billion capital expenditure in nuclear. And a new Office for Renewable Energy Deployment will be established to address barriers to renewables deployment including helping to develop the UK supply chain. Nuclear and renewables alone could create up to 260,000 jobs over the next ten years.
	Related documents have been placed in the Libraries of both Houses. These are:
	Manufacturing: New Challenges, New Opportunities (summary document)
	Manufacturing: New Challenges, New Opportunities (full strategy document—print out of document published on the BERR and DIUS websites)
	BERR Economics Paper No. 2: Five Dynamics of Change in Global Manufacturing—Underpinning Economic Analysis
	Memorandum of Understanding: Education and Training Support in the Manufacturing Sector."

TREASURY

Annual European Community Finances White Paper

Kitty Ussher: I am today laying before Parliament, the annual European Community Finances White Paper "Statement on the 2008 EC Budget and Measures to Combat Fraud and Financial Mismanagement" (Cm 7371). This White Paper is the 28th in the series. It gives details of revenue and expenditure in the 2008 EC Budget and covers recent developments in EC financial management and measures to counter fraud against the EC Budget. It includes information on amendments to the arrangements for the financing of the annual budget of the European Communities in the Own Resources Decision area. It also includes updates on the EC Budget review, the new Own Resources Decision and recent measures taken to improve the management and control of the EC Budget.

The Public Accounts Commission: Sixteenth Report

Angela Eagle: I welcome the work of the Public Accounts Commission (TPAC) on the new governance arrangements for the National Audit Office (NAO) as set out in its "Sixteenth Report" (HC 1027) published on 24 July.
	The Government will continue to work with TPAC, the NAO, Ministry of Justice and Parliamentary Counsel to prepare provisions for the Constitutional Renewal Bill to implement the Commission's recommendations.

Economic and Financial Affairs Council (Budget ECOFIN)

Kitty Ussher: On 17 July 2008, the UK permanent representative to the EU represented the UK at the Budget Economic and Financial Affairs Council (ECOFIN).
	The Council conducted its first reading of the EC Budget for 2009. The Council adopted a draft Budget that was supported by all member states.
	During a conciliation meeting between the Council and the European Parliament, six joint statements relating to the Budget were agreed. These concerned: Structural and Cohesion Funds and Rural Development 2007-13 programmes; Recruitment in Relation to the 2004 and 2007 enlargement; the EU Solidarity Fund; the European Globalisation Adjustment Fund and Emergency Aid Reserve; Implementation of the Budget in 2009; and an update of Administration financial programming. In addition Council agreed further statements on Payment Appropriations and Evaluation of Agencies.
	The Government are supportive of these statements, which call for a greater degree of transparency, sound financial management and budget discipline in the areas they concern.

COMMUNITIES AND LOCAL GOVERNMENT

Gypsy and Traveller Site Grant

Iain Wright: The Homes and Communities Agency as established in the Housing and Regeneration Act 2008 will for the first time bring together in one agency housing and regeneration funding, public land and expertise to deliver decent, affordable housing and regenerate our communities by creating places where people choose to live. It will play a key role in turning our ambition to deliver three million new homes by 2020 into a reality.
	As part of that role, I am today announcing that from 1 December 2008 the Homes and Communities Agency will take on responsibility for the Gypsy and Traveller Site Grant, which provides funding for the provision and refurbishment of Gypsy and Traveller sites. This approach will bring delivery of homes for Gypsies and Travellers into line with the arrangements for housing and accommodation delivery for the rest of the community. It reflects our determination to address the existing shortfall in accommodation for all in society, tackling the problems that can be caused by unauthorised camping and the poor life chances of Gypsies and Travellers themselves.
	The HCA will be responsible for administering the Gypsy and Traveller Site Grant to meet ambitious but realistic targets for the delivery of pitches across England. Through its close relationship with local authorities and other delivery partners, the HCA will be well placed to step up the pace of delivery for the benefit of both Gypsies and Travellers and the settled community. This approach responds to the findings of the independent task group on site provision and enforcement, chaired by Sir Brian Briscoe, whose report issued in December found that the policy framework for site provision was sound, but that delivery was slow.
	Ministers will continue to have oversight of the programme, ensuring that it achieves the Government's objectives of meeting Gypsies' and Travellers' accommodation needs and supporting community cohesion. We will also be asking the HCA to recommend any changes to the programme for 2010-11 that may be necessary to improve delivery. The sum of £97 million was allocated for the grant through the CSR07 period, and funding for 2009-10 and 2010-11 will be transferred in full to the HCA on its establishment.

DEFENCE

Service Children's Education

Derek Twigg: The chief executive of Service Children's Education has been set the following key targets for 2008-09.
	Key Target 1
	To match England Performance at key stages 1, 2 and 3 in all subject elements.
	Key Target 2
	In each of the key stages 1, 2 and 3 exceed national (England) achievement by 3 per cent. in a majority of the 12 subject elements.
	At the higher levels of attainment (that is, level 3+ at key stage l, level 5+ at key stage 2, level 6+ at key stage 3) match or exceed the national level of performance in 10 of the 12 subject elements.
	Key Target 3
	At GCSE level, improve the percentage of pupils achieving five or more A*-C (including Maths and English) from 2007-08 (45 per cent.).
	At GCSE level, achieve an average points score within 10 points of the national (England) "capped" upper quartile figure.
	At GCE "A"-Level, achieve 72 per cent. of pupil entries obtaining grades A-C.
	Key Target 4
	SCE to achieve a notional position in the English local authority league tables, within the leading 25 (of 150) LAs at each of key stages 1, 2 and 3.
	Key Target 5
	To achieve Grade 3, or above, for the overall effectiveness of the school in 100 per cent. of schools inspected, and Grade 2, or above, in not less than 66 per cent. of schools inspected.
	Key Target 6
	To achieve an overall parental customer satisfaction rating of at least 85 per cent. in the 2008-09 parental survey.

Military Low Flying

Derek Twigg: I have today placed in the Library of the House a revised report giving a detailed account of the low flying training that has taken place in the UK Low Flying System for the training year April 2007 to March 2008.
	The original report placed on 21 July 2008 was found to contain a number of printing errors that have been corrected.
	The report can be viewed on the MOD's website at:
	http://www.mod.uk/DefenceInternet/AboutDefence/WhatWeDo/AirSafetyandAviation/LowFlying/

FOREIGN AND COMMONWEALTH AFFAIRS

Hong Kong (Six-monthly Report)

David Miliband: The latest report on the implementation of the "Sino-British Joint Declaration on Hong Kong" was published today. Copies have been placed in the Library of the House. A copy of the report is also available on the Foreign and Commonwealth Office website at: www.fco.gov.uk. The report covers the period from 1 January to 30 June 2008. I commend the report to the House.

Georgia

David Miliband: I refer hon. and right hon. Members to the written (Prime) ministerial statement made by my right hon. Friend the Prime Minister today.

HOME DEPARTMENT

PA Consulting (Lost Data)

Jacqui Smith: I would like to update the House on the loss of sensitive data by PA Consulting and to inform the House that the Home Office has terminated the contract with PA Consulting that covered the handling of these data.
	On 19 August PA Consulting formally notified the Home Office of the loss of a data stick containing sensitive information relating to the JTrack system which PA manage under contract to the Home Office. I was informed the same day and immediately initiated an inquiry into this incident, undertaken by the Home Office Security Unit with advice and support from the Metropolitan Police. The incident inquiry has now been completed. The Information Commissioner and Cabinet Office have been kept fully informed. I have also today sent a full report to the Information Commissioner and have placed a copy in the House Library.
	JTrack is the operational system used by the police and Crown Prosecution Service as part of the Government's Prolific and other Priority Offender (PPO) programme. The data on JTrack relate to prisoners and other offenders in England and Wales.
	The inquiry found that data were transferred to PA from the Home Office in a secure manner. These data were not handled securely by a PA employee on their premises. Data were downloaded to a data stick. The data stick was used to transfer data between computers on the PA premises and was not encrypted or managed appropriately. The data stick went missing and, despite extensive searches, has not been found. This was a clear breach of the robust terms of the contract covering security and data handling.
	Based on the findings of the inquiry, the Home Office have decided to terminate this contract. My officials are currently working with PA to take this work back in house without affecting the operation of JTrack or the PPO programme. Data transfers to PA for JTrack were suspended immediately following the incident, data handling has now been transferred to the Home Office, and the system is fully operational. Other PA activity such as system maintenance and user training will be transferred by December.
	We are reviewing our other contracts with PA, specifically from a data handling and security perspective. Lessons learned from this incident more generally will be applied to working with suppliers on contracts involving sensitive data.
	Together with the Association of Chief Police Officers and the Ministry of Justice, we have undertaken careful assessments of the potential risks to individuals of this incident. The risk to public safety is assessed as low. The risk to individuals whose data were lost is also assessed as low. Appropriate measures are in place for individuals seeking information about the data held on them.
	The Home Office has been very active in implementing the findings of the Hannigan Data Handling Review but as with other incidents of data loss the Government are reviewing the circumstances of this incident and will ensure that any lessons, including in relation to strengthening the delivery chain, are incorporated in the ongoing programme of work to provide support and guidance to Departments on information assurance.
	Given the seriousness of this incident, I believe it is important both to provide external assurance to the public on our response to the incident and also to enable others to benefit from the lessons learned. Hence I have commissioned Dr. Stephen Hickey to undertake an external scrutiny of our response. I will be placing a report of his findings in the House Library in due course.

Police Pay

Jacqui Smith: On 6 December 2007, I published Sir Clive Booth's report "Determining Pay in the Police Service". Sir Clive Booth recommended that a pay review body for police officers should be created. I indicated that the Government accepted his recommendations and we would consult on proposals for implementing the necessary changes to the police officer pay machinery.
	On 8 January 2008, I wrote to the Police Negotiating Board (PNB) asking them to consider a multi-year deal for police officers based on the index used by the Police Arbitration Tribunal (PAT) in 2007. I made clear that if the PNB agreed such a deal then it could be implemented in full, and the issue of implementing a pay review body for police officers would become less pressing. We therefore deferred consultation on the implementation of a pay review body while negotiations on a multi-year deal were taking place. The Government's approach on this was also set out in "From the Neighbourhood to the National: Policing our Communities Together" (Cm 7448) published on 17 July 2008.
	The official Side of the PNB made an offer of a three-year pay deal which was one of the most generous in the public sector. Regrettably, there was a failure to agree with the staff side on this basis. In the event that the PNB had agreed a multi-year deal there would have been no role for a pay review body for some time, but disappointingly for the third consecutive year a deal was not agreed.
	The Government are therefore today beginning consultation on proposals for implementing a pay review body for police officers. Sir Clive Booth already consulted widely with policing stakeholders when undertaking his review. So this second consultation will be an opportunity for stakeholders to comment on the detail of the proposed changes to the police officer pay machinery, including : the scope and purpose of the new body; its remit; membership and coverage.
	The consultation will close on Wednesday 5 November 2008.
	I have today placed a copy of the consultation document in the Library of the House.

Review of Police Injury Awards

Tony McNulty: On 25 August I published a consultation document, "Review of Police Injury Benefits: Government Proposals", which sets out proposals for a revised police injury awards scheme in the UK. We intend that the new scheme should be in place as early as is possible in 2009, following agreement of the key issues in the Police Negotiating Board by December this year.
	The review of the current police injury awards scheme has given us the opportunity to ensure that we have a system of benefits with criteria suitable for modern-day conditions and which ensures that the financial support currently given to police officers and their families for injury or death in the line of duty is properly targeted and is effectively and consistently administered by police forces. The proposals in the consultation document cover a range of issues, including the eligibility criteria for receiving an award, the structure of benefits under the scheme for both former officers and their survivors, and the role of police authorities and medical practitioners involved in considering claims for awards.
	Key proposals set out in the consultation document include:
	The introduction, as announced by the Home Secretary to the Police Federation conference in May this year, of life-long adult survivor benefits and the extension of survivor benefits to nominated unmarried and unregistered partners in cases where an officer dies in the line of duty. At present survivor benefits for death in the line of duty are restricted to bereaved spouses and civil partners and are stopped on remarriage or cohabitation.
	Simplifying injury and survivor awards so they are easier to understand and apply. For instance, if an officer dies or is totally disabled within one year of an injury in the line of duty, the lump sum payment made will as a matter of course be five times the officer's pensionable salary. Currently financial support is set at four times the officer's actual total salary if that works out to be the lesser amount.
	Making injury and death payments fairer. The pensionable salary on which lump sum awards are based will be changed so that it is based on average pensionable pay. This will take account of a person's working hours averaged over his or her police career rather than simply the pensionable pay at the time the officer ceased to serve. This will protect those who may have just reduced their hours before being injured.
	Revising the eligibility criteria and clarifying the definition for injuries received in the line of duty. This clarification will mean officers will be specifically covered for injury benefits as a result of a terrorist attack and will focus benefits on those injuries received in the line of duty. Proposals will also include withdrawing cover for injury or death sustained on a journey to or from work where the cause was not related to police duty—to bring injury benefits for the police service in line with injury benefits for other public servants.
	A clearer link between injury awards and police duty, by introducing a five-year time limit for new post-retirement claims, except in the case of specified progressive illnesses and specified conditions with a long incubation period.
	A clearer link between injury awards and compensation for loss of earnings, by introducing an absolute cut-off for new claims at age 65 or state pension age at the time if over 65.
	Replacing injury pension reviews at age 65 (or the state pension age at the time if over 65) by introducing a new minimum retirement income guarantee. Under the current system officers injured early in their career can suffer a large reduction in financial support in their retirement if the review takes them to the lowest pay banding. The new retirement income guarantee will protect against this.
	No longer paying injury pensions in cases where a former officer has suffered only a very slight loss of earning capacity as a result of the injury. In cases where the loss of earning capacity is 10 per cent. or less the former officer will receive a lump sum payment in recognition of the injury. This will allow benefits to be targeted where they are needed most.
	Any changes made as a result of the review will apply to officers serving at the time of implementation, regardless of whether they have already sustained an injury. They will not apply retrospectively however, that is, to officers who have already retired when the changes come into force—they will still be dealt with under the system as it currently stands, even if they have not yet applied for an award.
	Our aim is to create a transparent, fair and effective system that provides police officers reassurance to deal with the difficulties that 21st century policing brings. I hope that a constructive and active debate ensues on the proposals we have announced.
	The consultation exercise is being conducted on a UK-wide basis in co-operation with the Scottish Executive and the Northern Ireland Office. Copies of the consultation document have been placed in the Library. Further copies can be downloaded from: www.homeoffice.gov.uk/about-us/haveyoursay/current-consultations/. Comments have been requested by 18 November 2008.

LEADER OF THE HOUSE

"Audit and Assurance of MPs' Allowances"

Harriet Harman: Following debates in July, I published a consultation document, "Audit and Assurance of MPs' Allowances" (Cm7460) on 5 August, 2008. It outlines proposals for further action to improve the financial control and audit of the system of allowances claimed by MPs. Copies of the document are available at: www.commonsleader.gov.uk. I have requested that MPs submit their responses by Monday, 29 September 2008.

PRIME MINISTER

Extraordinary European Council: Georgia/Russia

Gordon Brown: Between 8 and 12 August, Russian and Georgian troops clashed in Georgia's separatist region of South Ossetia. The resulting conflict led to a tragic loss of civilian life, and the displacement of over 100,000 people.
	From the start of the conflict, the UK and its international partners have been involved in intensive discussions, including through the UN, EU, NATO, G7 and OSCE, to agree a ceasefire and to find a durable and peaceful way forward. I spoke to Russian President Medvedev and to other Heads of State, including Presidents Bush and Sarkozy, to try to find a way forward. My right hon. Friend the Foreign Secretary visited Georgia where he met President Saakashvili and Members of his Government.
	On 12 August, the EU and OSCE were able to broker a ceasefire between the parties and agreement to a way forward. This agreement included six key principles:
	the parties not to resort to the use of force;
	the parties to stop all military actions for good;
	the parties to allow free access for humanitarian aid;
	Georgian armed forces to return to their places of usual permanent deployment;
	Russian armed forces to withdraw to the line they occupied before the start of military actions. Until such time as an international mechanism is created, Russian peacekeeping forces to implement additional security measures;
	the parties to engage in international discussions on the modalities of security and stability in Abkhazia and South Ossetia.
	Despite this plan, on 26 August, Russia unilaterally recognised the independence of South Ossetia and of Georgia's other separatist region, Abkhazia. Russia also refused to withdraw its forces from Georgia and in some cases moved to reinforce them.
	It was in this context that I and my right hon. Friend the Foreign Secretary attended the Extraordinary European Council on 1 September, convened by French President Nicolas Sarkozy, in his capacity as current presidency of the EU, to discuss the current crisis in Georgia.
	At this meeting the European Council unanimously condemned Russia's decision to recognise the independence of Abkhazia and South Ossetia; and expressed its grave concern about the consequences of the conflict and Russia's disproportionate military action. Russia's actions were in clear breach of international law and of successive UN Security Council Resolutions.
	In response to Russian actions, the Council decided to conduct a comprehensive review of EU-Russia relations. This evaluation has begun and will continue in the run up to the next EU-Russia summit scheduled to take place in Nice on 14 November 2008. The EU has decided to suspend negotiations with Russia on the new EU Partnership and Co-operation Agreement (PCA) until Russian troops withdraw from Georgia to their pre-conflict line. We strongly support this decision. As I made clear during Council discussions, although the EU should continue discussions with Russia on areas of interest and concern to the EU, it cannot be "business as usual". This review will allow us to take a considered decision about the future of EU-Russia relations.
	Russia's actions in Georgia illustrate the need for Europe to intensify efforts to ensure its long-term energy security. The European Council tasked the EU with examining initiatives to be taken to this end. We should explore all options for the diversification of energy supply in the EU, including increased support for infrastructure that diversifies energy sources, an increased commitment to renewable energy, measures to improve energy efficiency and measures to improve the internal market.
	The international community must support Georgia in rebuilding the damage caused by the conflict. The European Council made clear the EU's commitment to supply humanitarian aid and support for Georgia's long-term reconstruction efforts, including in Abkhazia and South Ossetia. The Council and the Commission have been tasked to start preparations for an international conference to bring focus to reconstruction efforts. The UK will play its part. We have already committed £2 million to Georgia in humanitarian aid. The EU has pledged to step up its relations with Georgia, including through visa facilitation measures, appointing an EU special envoy and the possible establishment of a full and comprehensive free trade area as soon as the conditions are met.
	At the European Council, the EU unanimously called on the parties to implement the EU/OSCE peace plan in full. On 8 September, President Sarkozy, EU Commission President Barroso and EU High Representative Solana travelled to Moscow to press Russia to abide by its commitments. I welcome the agreement reached during this meeting that Russia will withdraw its troops from Georgian territory outside Abkhazia and South Ossetia and that Russia will commit to international discussions on future security modalities. This is a good first step towards peace and security. But it is only the start; Russia must now implement these commitments and must engage fully in finding a lasting solution to the crisis.
	The international community will support efforts to ensure lasting peace and security in the region, including through the presence of observers on the ground. In line with the EU Council conclusions and the 8 September Moscow agreement, the European Union will contribute to these efforts. EU Foreign Ministers will discuss the deployment of EU monitors at the General Affairs and External Relations Council (GAERC) on Monday, 15 September. It is vital that international monitors are given free and unfettered access by all sides to carry out their mandate.
	The EU's response to this crisis must also consider the implications for the EU's common neighbourhood. On 27 August my right hon. Friend the Foreign Secretary travelled to Kiev where he made a speech on the need for closer ties between the EU and the region. I am pleased that the Council agreed that the EU should strengthen its relations with the region, including Ukraine. I welcome the successful EU—Ukraine summit which took place yesterday (9 September). I look forward to the Commission's proposals for enhancing EU relations with the region, due in December this year.
	The UK will continue to work with international partners to ensure that effective support is given to Georgia and that a lasting, peaceful solution is reached as soon as possible.
	My right hon. Friend the Foreign Secretary and I will continue to keep the House informed of developments.

WORK AND PENSIONS

Stakeholder Receptions

James Plaskitt: I have today published a list of receptions hosted by Department for Work and Pensions Ministers in the 2007-08 financial year.
	The total cost of receptions held for the financial year 2007-08 was £368.00.
	
		
			 Date Event Number invited Host 
			 19 February 2008 Introductory reception with key Working Age stakeholders 27 James Purnell 
			 5 March 2008 Introductory reception with key Pensions and Disability stakeholders 27 James Purnell